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What is MERCOSUR and its reasons for creation?


MERCOSUR is a regional integration process that has its origins in the signing of the Treaty of Asunción, on March 26, 1991. This agreement was signed by the Argentine Republic, the Federal Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay, which are the main states part of the organization (MERCOSUR, 2015). Its foundational goals were to boost the global economic growth of the area, to improve resource allocation and to increase the welfare of citizens of member countries (UNED Documentos, 2005). Likewise, the Treaty of Asunción tried the implementation of automatic tariff reductions among these members countries, and promoted several measures to achieve mainly the trade liberalization (Roett, R., 1999); these measures promoted the free circulation of goods, people, services, and capital, just as the establishment of a common external tariff, the creation of a common commercial policy, the coordination of macroeconomic and sectoral policies between the members, the respect of competition rules and the alignment of internal policies to strengthen the integration process. (Lattuca, A., Ciuro Caldani, M. A., 1998)

  (Ecos Latinoaméricanos, 2016)


Furthermore, there was a transitional period, from November 29, 1991, to December 31,1994, in which the organizational structure was comprised of the CMC and CMG. The CMC is composed of the ministers of foreign affairs and the economy of the member countries and was responsible for the political direction of the integration process. Also, the GMC is the implementing organ which was coordinated by the ministries of foreign affairs and made up of representatives of public entities of the national governments.  (Roett, R., 1999) The main characteristics of this period were: an unilateral opening accompanied by the reduction of tariffs between the four countries, which is made possible intra-regional liberation and minimized the resistance of several sector to the integration process,  a positive international context and macroeconomic stabilization due to the interest rate falls which allowed a strong capital inflow to all the region; a non-linear integration process, due to disputes between the members during the creation of goals or economic policies, and  dynamism of intra-regional trade, which was caused by the speed of reduction tariff between the members and the strong capital inflow. (Jardel, S., & Barraza, A., 1998).

The creation of the Protocol of Ouro Preto on December 17th, 1994 marked the end of the transition period and implementation of the main results negotiated during that period. Also, the organization came to have an international juridical personality, which enables it to participate as a single entity in international negotiations. The Common Market Council and Common Market Group remain and have the same functions they had earlier. Also, The Commission on Trade was created and entrusted with implementing and monitoring the instruments for common trade policy, just as it’s an intergovernmental body. Moreover, The Joint Parliamentary Commission, made up of legislators from the 4 countries, and the Advisory Forum on Economic and Social Matters, with representatives from business and labor, were created.  (Roett, R.,  1999)

The followed table shows the current organizational structure of MERCOSUR:
The organizational structure of MERCOSUR
Type
Intergovernmental
Highest political body (Presidential level)
Summit of presidents of MERCOSUR
Executive control(Ministerial level)
-Council of the Common Market
-Commission of Permanent Representatives
Jurisdictional body
Not defined
Parliamentary body
MERCOSUR Parliament
Sectoral control
Sectoral Ministerial Meetings
Executive body
-Common Market Group
-Trade Commission
Permanent Secretariat
MERCOSUR Secretariat
External Trade Negotiation
Negotiation in common/Single position
Economic-Social Consultative body
Economic and Social Consultative Forum
Financial institution
FONPLATA
(Own elaboration but based on León Li, J. M., 2011.)


References:

Jardel, S., & Barraza, A. (1998). El MERCOSUR como Unión Aduanera in MERCOSUR: Aspectos jurídicos y económicos. (pp.65-70) Buenos Aires, Argentina: Ediciones Ciudad Argentina. 


MERCOSUR (2015) Mercosur: estructura y agendas. [PDF file] Secretaría del Mercosur. Retrieved from https://www.mercosur.int/media/publicaciones/?cp_71=2#
Lattuca, A., Ciuro Caldani, M. A., (1998). A estrutura organica do Mercosul in Economía Globalizada y Mercosur (pp.39-54). Buenos Aires, Argentina: Ediciones Ciudad Argentina.
León Li, J. M. (2011) South American integration under the EU framework in Regional Integration Process in South America: Analysis of institutions and policies of regional integration under the EU framework. (pp.26-48) Hamburg, Germany: Diplomica Verlag
UNED Documentos (2005, March 04) Mercosur: Pasado, Presente y Futuro [Video filed]. Retrieved from https://canal.uned.es/video/5a6f8d76b1111fa57b8b4579 
Roett, R. (1999) Toward the Common Market of the South: Mercosur’s Origins, Evolution, and Challenges in Mercosur: Regional Integration, World Markets (pp.7-24). Colorado, US: Lynne Rienner. 

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